Question 1
Nonvalue-maximizing behavior is most common:
a. in vigorously competitive markets.
b. When shareholders are poorly informed.
c.when managers own a significant ownership interest.
d.in the production of goods rather than services.
Question 2
Managerial economics cannot be used to identify:
a. how macroeconomic forces affect the organization.
b. goals of the organization.
c. Ways to efficiently achieve the organization's goals.
d. microeconomic consequences of managerial behavior.
Question 3
Business profit is
The residual of sales revenue minus the explicit accounting costs of doing business.
a. a normal rate of return.
b. economic profit.
c. the return on stockholder's equity.
Question 4
Monopoly exploitation is reduced by regulation that:
a. enhances product-market competition.
b. increases the bargaining power of workers.
c. increases the bargaining power of employers
d. restricts output.
Question 5
The value of the firm is equal to:
a. the present value of tangible assets
b. the present value of all future revenues
c. the present value of all future cash flows.
d. current revenues less current costs.
Question 6
Economic profit equals:
a. normal profits plus opportunity costs.
b. business profits minus implicit costs.
c. business profits plus implicit costs.
d. normal profits minus opportunity costs.
Question 7
An equation is:
a. an analytical expression of functional relationships.
b. a visual representation of data.
c. a table of electronically stored data.
d. a list of economic data.
Question 8
The breakeven level of output occurs where:
a. marginal cost equals average costs.
b. marginal profit equals average costs.
c. total profit equals zero
d. marginal costs equals marginal revenue.
Question 9
Inflation is:
a. a line that touches but does not intersect a given curve.
b. a point of maximum slope.
c. a measure of the steepness of a line.
d. an activity level that generates highest profit.
Question 10
If P = $ 1,000 - 4Q:
a. MR = $ 1,000 - 4Q.
b. MR = $1000 - 8Q.
c. MR = $1,000Q - $4.
d. MR = $250 - $.25P
Question 11
Total cost minimization occurs at the point where:
a. MC=0.
b. MC=AC
c. AC=0
d. Q=0
Question 12
At the profit-maximizing level of output:
a. Marginal profit equals zero
b. marginal profit is less than average profit.
c. marginal profit exceeds average profit.
d. marginal cost equals average cost,